Beyond Wal-Mart, Retailers Are Still Ahead of the Pack

Forget the headlines about Wal-Mart Stores Inc. cutting orders and J.C. Penny Co. needing more money -- retailers as a group have the strongest earnings growth of all the sectors that make up the S&P 500:

As goes growth, so go returns. Retailers are also the best performing group in the S&P 500, after gaining almost 30 percent so far this year. The next closest is health care, which as a group has added 26 percent, followed by industrials, which rose 22 percent. Retailers have led the market nearly every week this year.

Today we have ten retailers that are at the top of this leading sector. I screened for earnings growth of at least 12 percent in both 2013 and 2014, based on consensus estimates of the analysts tracked by Bloomberg. Additionally, I considered only those companies with a price-to-earnings ratio of less than 20x.

Several companies narrowly missed 12 percent growth, but they are still worth a mention -- so here they are exclusively for blog readers: Ann Inc. (ANN), Group 1 Automotive Inc. (GPI), HSN Inc. (HSNI), L Brands Inc. (LTD), Ross Stores Inc. (ROST) and, curiously, funeral-home operator Service Corp. International (SCI) -- aging demographics, or just a destination for JCP?

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